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What can be exempted in a Chapter 7 bankruptcy?

Though the Great Recession may have come and gone, many Americans, including those in Michigan, still find themselves struggling with debt. Those who struggle with debt may have trouble sleeping at night and focusing at work and family functions because of the stress caused by financial strain. Though it may seem scary, these individuals should take comfort knowing that they may be able to find debt relief in the form of Chapter 7 bankruptcy.

This type of bankruptcy is also known as liquidation bankruptcy because an individual liquidates, or sells, his or her assets in order to satisfy his or her debts. This might conjure images of an individual left without a shirt on his or her back, but federal bankruptcy laws allow individuals to exempt certain types of property under Chapter 7 bankruptcy, allowing them the opportunity to carry on after bankruptcy and find the stability they need.

Exemptions can make all the difference when filing for bankruptcy. One exemption is the homestead exemption. Though there are limits on the size of the exemption one can claim, it might be enough to allow an individual to keep his or her home. A certain amount of worth in a vehicle can be exempted, also, perhaps allowing an individual to maintain his or her ability to get to work. Some personal property may also be exempted under Chapter 7.

Chapter 7 bankruptcy is a very real option for those facing financial difficulties. However, going through the process should be carefully planned in order to avoid unintended consequences. For this reason, many find it beneficial to discuss the matter with a bankruptcy attorney, which may help them gain a clearer sense of the situation and how the process can best benefit them.

Source: FindLaw, "Bankruptcy Exemptions: Chapter 7," accessed Aug. 24, 2015

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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